Indore exchange seeks nod for palm oil futures

India's only commodity exchange in soya, based in Indore, will relaunch futures in palm oil.

The exchange has sought permission for futures trade in RBD palmolein before the Forward Markets Commission. Its rates on crude palm oil are available on the website nbotind.org.

"We will revitalise futures trade in palm oil soon. We have obtained permission regarding this," Jeyakumar A S, executive director of the exchange, told Business Standard.

The National Board of Trade has also requested permission for futures trade in gram (chana), chick peas, and cotton seed cake.

The board is the most active exchange in Madhya Pradesh, established in July 1999. Commodity futures in the state offer good potential for other commodity exchanges.

The National Commodities and Derivatives Exchange Ltd (NCDEX) is eyeing the Madhya Pradesh commodity market for soya and its derivatives, wheat, and gram. The commodity exchange has already started online trading in Madhya Pradesh through its 100 centres.

However, as regards online futures in various commodities, particularly wheat and soya, it plans to take a different route, particularly since Madhya Pradesh leads in soya production and comes third in wheat production after Punjab and Uttar Pradesh. "We will go through local mandis, banks, post offices, and the Madhya Pradesh State Warehousing & Logistics Corporation," an NCDEX official told Business Standard.

The board is also likely to face challenges from commodity exchanges like NCDEX, since the board, according to an industry source, "has seen price rigging." The commodity market is also unhappy with the functioning of the board since it is "operated by a group of processors."

NCDEX has plans to launch a pilot project for farmers. They will be able to stock their commodities like wheat and soya at the State Warehousing Corporation, and will get loans or financial assistance from member banks of NCDEX against warehouse receipts.

"This is an effort to minimise the interference of adhatias (mandi brokers) in the commodity markets," said an NCDEX source.

According to market sources, the board's daily trade turnover is Rs 350 crore, expected to double this year. However, the volume according Jeyakumar is "stagnating and stands at around 80,000 tonnes."